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No.

535 February 22, 2005 Routing

Robin Hood in Reverse


The Case against Economic Development Takings
by Ilya Somin

Executive Summary

The Fifth Amendment and most state constitu- precedent to uphold economic development tak-
tions prohibit government from condemning pri- ings in the case of Kelo v. City of New London.
vate property except for a “public use.” Traditionally, Shortly thereafter, the U.S. Supreme Court
that has forbidden most condemnations that trans- agreed to hear the appeal of the property owners.
fer property from one private owner to another. If the Court decides in favor of the homeowners,
In recent years, however, many state courts the resulting decision will constrain economic
have read “public use” more broadly to allow development condemnations nationwide.
government to transfer property from one pri- Federal and state courts should ban econom-
vate owner to another simply because the latter is ic development takings. Such takings are usually
expected to make a greater contribution to the the product of collusion between large and pow-
local economy. The most notorious of these deci- erful interests and government officials against
sions was the 1981 Poletown decision, in which comparatively powerless local residents. They
the Michigan Supreme Court allowed the City of generally produce far more costs than benefits,
Detroit to uproot some 4,200 people in order to as the Poletown case dramatically demonstrates.
make way for a General Motors plant. Finally, the economic development rationale ren-
But last summer the Michigan Supreme ders nearly all property rights insecure because it
Court overturned Poletown, just after the can justify virtually any taking that benefits a pri-
Connecticut Supreme Court had relied on that vate business interest.

_____________________________________________________________________________________________________
Ilya Somin is assistant professor of law at the George Mason University School of Law. He was the author of an ami-
cus brief for the Institute for Justice and the Mackinac Center for Public Policy in County of Wayne v. Hathcock
and is the author of an amicus brief for Jane Jacobs in Kelo v. City of New London.
The Poletown Introduction issue has been reopened. In particular, less
court justified than a year ago, in County of Wayne v.
Recent court decisions have rekindled the Hathcock,5 the Michigan Supreme Court over-
destroying longstanding debate over whether government ruled Poletown Neighborhood Council v. City of
an entire can condemn private property and transfer it Detroit,6 the most notorious of the decisions
to new private owners for the sole purpose of justifying economic development takings.
neighborhood promoting “economic development.” Both the Shortly thereafter, the U.S. Supreme Court
and condemning Fifth Amendment to the federal Constitution decided to review the Connecticut Supreme
the homes of and nearly all state constitutions contain a Court’s decision in Kelo v. City of New London,7
“public use clause.”1 By implication, such a case upholding the constitutionality of eco-
4,200 people, as clauses prohibit government from taking pri- nomic development takings under the federal
well as numerous vate property, even when compensation is paid Constitution’s takings clause. Unlike Hathcock,
businesses, to the owner, except for a “public use.” But for decided under Michigan’s state constitution,
some time the U.S. Supreme Court and many Kelo raises the prospect that economic devel-
churches, and state courts have allowed that restriction on opment takings might be banned or restrict-
schools, so the the condemnation power to atrophy. In 1984, ed nationwide.
in the leading case of Hawaii Housing Authority v. For more than 20 years, Poletown stood as
land could be Midkiff, the Supreme Court held that condem- both the most infamous symbol of eminent
transferred nations and private-to-private transfers are domain abuse and a precedent justifying
to General acceptable under the public use provision of nearly unlimited power to condemn private
the takings clause as long as they are “rational- property.8 As one scholar of the subject put it,
Motors for the ly related to a conceivable public purpose.”2 As “To many observers of differing political view-
construction of a a result of Midkiff and similar decisions in many points, the Poletown case was a poster child for
state courts, local governments have been able excessive condemnation.”9 Poletown held that
new factory. to undertake so-called “economic develop- condemnations transferring property from
ment takings”—transfers from one owner to one private party to another satisfied the
another, justified simply on the ground that “public use” requirement even if the only
the new owner is expected to make a greater claimed public benefit was that of “bolster-
contribution to the local economy. The eco- [ing] the economy.”10 While it was not the
nomic development rationale has allowed the first decision upholding so-called “economic
use of eminent domain in a much wider range development” takings,11 Poletown was by far
of cases than the traditional view, which held the most widely publicized and notorious. Its
that condemnation is permitted only for a notoriety stemmed from the massive scale
“public use”—only if it leads to public works and seeming callousness of Detroit’s use of
projects such as roads or bridges or, at the very eminent domain: destroying an entire neigh-
least, paves the way for public utilities, such as borhood and condemning the homes of
power lines used by all. 4,200 people, as well as numerous businesses,
Thus, a recent treatise written by two well- churches, and schools, so the land could be
known scholars concludes that “nearly all transferred to General Motors for the con-
courts have settled on a broader understand- struction of a new factory.12 Aside from the
ing [of public use] that requires only that the moral and humanitarian concerns at issue,
taking yield some public benefit or advan- Poletown raised the fear that if “economic
tage.”3 That statement was not entirely accu- development” could justify such massive dis-
rate even at the time it was written, as some location, it could be used to rationalize
state supreme courts continue to follow a almost any condemnation that benefited a
more restrictive approach to “public use.”4 private business in a way that might “bolster
Yet for a time it did reflect the dominant the economy.”13
view. Thus, the Michigan court’s recent deci-
More recently, however, the public use sion to overturn Poletown was an important

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milestone in the history of eminent domain demnation that transfers property to a com-
law. Moreover, Hathcock and Kelo are closely mercial enterprise.
connected. Decided by the Connecticut Several other aspects of economic devel-
Supreme Court just a few months before the opment takings also exacerbate the danger of
Hathcock opinion was issued, Kelo relied heav- abuse, including the failure to require the
ily on Poletown in justifying its conclusion new owners of condemned property to actu-
that economic development is a valid “public ally provide the economic benefits that sup-
use.” The majority opinion in Kelo described posedly justify condemnation in the first
Poletown as a “landmark case . . . [that] place, and the refusal of courts to consider
illustrates amply how the use of eminent the social and economic costs of condemna-
domain for a development project that bene- tion as well as the claimed benefits.
fits a private entity nevertheless can rise to The Poletown majority was not completely
the level of a constitutionally valid public oblivious to such dangers, and it sought to
benefit.”14 mitigate them by requiring “heightened
In addition to those two highly publicized scrutiny” in cases in which “the condemna-
cases, several lower federal courts and the tion power is exercised in a way that benefits
supreme courts of Illinois and South specific and identifiable private interests.”18
Carolina have recently invalidated or severely Unfortunately, the Poletown case itself and 23
Even a categorical
restricted the economic development ration- years of experience since then show that the ban on economic
ale for takings.15 Eight state supreme courts heightened scrutiny test is not an adequate development
now categorically forbid economic develop- bulwark against the dangers of economic
ment takings,16 and several others, at the very development takings, and may in some cases takings is not a
least, seek to restrict them.17 But the battle is actually exacerbate those risks. comprehensive
far from over, even if the judicial tide is now The second part of this study shows that
starting to run against economic develop- even a categorical ban on economic develop-
solution to the
ment takings. ment takings is not a comprehensive solu- underlying
This study argues that courts should ban tion to the underlying problem of eminent problem of
economic development takings. A categorical domain abuse. Although Hathcock held that
ban is the best solution to the problems cre- “a generalized economic benefit” is not by eminent domain
ated by Poletown and other such decisions. itself enough to justify condemnation,19 it abuse.
Several of Poletown’s most serious flaws per- does not forbid all condemnations that
sist in takings decisions in other states—flaws transfer private property to other private par-
found in Kelo itself. At the same time, it is ties. The same is true of similar decisions in
essential to recognize that a ban of the kind other states.
the Hathcock court fashioned is not a panacea The Hathcock court outlined three cate-
for all abuses of the power of eminent gories of takings in which private-to-private
domain on behalf of private interests. transfers are still permissible: “public necessity
The first part of this study uses the of the extreme sort”; cases in which the con-
Poletown decision as an exemplar of the flaws demned property remains subject to “public
of economic development takings generally. oversight” after transfer to a private entity; and
Such condemnations allow politically power- situations in which the condemned property
ful interest groups to “capture” the condem- “is selected because of ‘facts of independent
nation process for the purpose of enriching public significance’” rather than because of
themselves at the expense of the poor and the new owner’s uses.20 Unfortunately, both
politically weak. While economic develop- logic and experience in other states show that
ment takings are not the only condemna- these exceptions, particularly the second and
tions subject to this kind of abuse, they are third, may be vulnerable to some of the same
especially vulnerable to it because “economic kinds of interest group exploitation as eco-
development” can justify almost any con- nomic development takings. If not properly

3
policed, they could even result in what would demnation to aid private businesses.”22 The
amount to a back-door revival of the econom- economic benefit criterion, he continued, pro-
ic development rationale under a new name. vides virtually a blank check for takings
because “[a]ny business enterprise produces
benefits to society at large.”23
Dangers of the Economic Courts in at least two of the other states
Development Rationale for that forbid economic development takings
have reached the same conclusion. Like the
Condemnation Michigan Supreme Court in Hathcock, the
A categorical ban on economic develop- supreme court of Illinois recently refused to
ment takings is the best way to control abuse allow a “contribu[tion] to economic growth
of the eminent domain power for the benefit in the region” to justify a taking because such
of private interests. A variety of circumstances a standard could justify virtually any con-
render these types of condemnations unusual- demnation that benefited private industry
ly vulnerable to interest group exploitation. since “every lawful business” contributes to
economic growth to some degree.24 The
The Economic Development Rationale supreme court of Kentucky, which banned
Can Justify Almost Any Taking That the economic development rationale in
Benefits a Commercial Enterprise 1979,25 did so largely on grounds that,
One of the main driving forces behind “[w]hen the door is once opened to it, there is
Hathcock is the court’s recognition that allow- no limit that can be drawn.”26 The Kentucky
ing “economic development” to justify con- court noted that “[e]very legitimate business,
demnation of private property is almost a to a greater or lesser extent, indirectly bene-
blank check for the abuse of government fits the public by benefiting the people who
power on behalf of powerful private interests. constitute the state”; thus, the economic
As the court explained: development rationale can be used to justify
virtually any condemnation that transfers
[The] “economic benefit” rationale property to private businesses.27
would validate practically any exercise Those decisions slightly overstate the case,
of the power of eminent domain on but their basic logic is sound. Economic devel-
behalf of a private entity. After all, if opment can rationalize virtually any taking
one’s ownership of private property is that benefits a private business because any
forever subject to the government’s such entity can claim that its success might
Economic determination that another private “bolster the economy.”28 It is possible to try to
development can party would put one’s land to better limit the scope of the development rationale
rationalize use, then the ownership of real proper- by requiring that the economic benefit gained
ty is perpetually threatened by the exceeds some preset minimum size. This,
virtually any expansion plans of any large discount indeed, is what the Poletown court tried to do
taking that retailer, “megastore,” or the like.21 when it held that the benefit must be “clear
benefits a private and significant.”29 Yet this amounts to simply
That claim is not new. Indeed, it was advanced saying that any taking benefiting a sufficient-
business because by the dissenters in Poletown. Justice Fitzgerald ly large business enterprise can qualify.
any such entity warned that “the decision that the prospect of Moreover, this rationale actually creates per-
increased employment, tax revenue, and gen- verse incentives to increase the amount of
can claim that its eral economic stimulation makes a taking of property condemned for any given project.
success might private property for transfer to another private Although the economic development ration-
“bolster the party sufficiently ‘public’ to authorize the use ale may not be limitless in the way that
of the power of eminent domain means that Hathcock’s more expansive rhetoric implies,
economy.” there is virtually no limit to the use of con- neither can it be easily constrained.

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Dangers of the Failure to Impose Binding Yet, as Justice Ryan emphasized in his dis- The Poletown con-
Obligations on New Owners of senting opinion, the court failed to impose demnations dra-
Condemned Property even minimal requirements of this kind.34
The danger of abuse created by the eco- City of Detroit v. Vavro,35 a 1989 Michigan matically illus-
nomic development rationale has been greatly Court of Appeals decision interpreting trate the
exacerbated by courts’ failure to require new Poletown, confirmed Ryan’s view, holding
owners of condemned property to actually that “a careful reading of the Poletown deci-
danger of taking
provide the economic benefits that justified sion reveals that . . . a binding commit- inflated estimates
condemnation in the first place. The lack of ment [to provide the economic benefits used of economic
such a binding obligation creates incentives to justify condemnation] is unnecessary in
both for businesses to look to acquire proper- order to allow the city to make use of emi- benefit at face
ty “on the cheap” through eminent domain nent domain.”36 Indeed, the Vavro court went value.
and for public officials to rely on exaggerated on to conclude that Poletown did not even
claims of economic benefit that neither offi- require the new owner to proceed with the
cials nor businesses have any obligation to live project that was initially used to justify the
up to. In some cases, this could even lead to condemnation, much less proceed with it in
the use of “bait and switch” tactics under a way that provided some predetermined
which the new owners need not use the con- level of economic benefit to the public.37
demned property for the originally intended Although the Vavro court expressed its dis-
purpose at all. Such incentives greatly increase taste for those conclusions and even took the
the likelihood that economic development unusual step of urging that Poletown be over-
takings will lead to abuse. As the Seventh ruled,38 it nonetheless felt compelled to hold
Circuit recently held, “[t]he public use require- that Poletown imposes no obligation to actu-
ment would be rendered meaningless if it ally provide the “clear and significant” eco-
encompassed speculative future public bene- nomic benefits on which the power to con-
fits that could accrue only if [the new] demn supposedly hinges.39
landowner chooses to use his property in a Inflated claims of economic benefit in
beneficial, but not mandated, manner.”30 Poletown. The Poletown condemnations dra-
Courts in a number of jurisdictions have matically illustrate the danger of taking inflat-
held that property cannot be condemned ed estimates of economic benefit at face value.
without advance assurances that it will be The City of Detroit and GM claimed that the
employed only for specified public uses.31 construction of a new plant on the expropriat-
Unfortunately, Poletown and other decisions ed property would create some 6,150 jobs.40
permitting economic development takings The estimate of “at least 6,000 jobs” was for-
depart from this sensible principle. mally endorsed by both Detroit Mayor Cole-
Poletown’s Failure to Impose Binding Legal man Young and GM Chairman Thomas
Obligations on the New Owners of Condemned Murphy.41 Yet neither the city nor GM had any
Property. The Poletown court upheld the mas- legal obligation to actually provide the 6,000
sive condemnations in Detroit primarily, if jobs or the other economic benefits they had
not solely, because of the “clear and signifi- promised.
cant” economic benefits that the GM factory The danger inherent in this arrangement
was expected to provide for the city.32 Indeed, was apparent even at the time. As Justice
the majority suggested that if the expected Ryan warned in dissent, “there are no guar-
benefits were not so great, “we would hesitate antees from General Motors about employ-
to sanction approval of the project.”33 This ment levels at the new assembly plant . . .
fact renders all the more dubious the court’s [O]nce [the condemned property] is sold to
failure to require either the city or GM to General Motors, there will be no public con-
ensure that the expected benefits would actu- trol whatsoever over the management, opera-
ally materialize. tion, or conduct of the plant to be built

5
there.”42 Ryan pointed out that “General Why would such a systematic failure arise?
Motors will be accountable not to the public, It is difficult to know for certain, especially
but to its stockholders”; it would therefore since neither the Poletown court nor courts in
make decisions as to the use of the property other states upholding the economic develop-
based solely on stockholder interests, not the ment rationale have ever explained their rea-
city’s economic interests, which the condem- sons for failing to impose binding obligations
nation was intended to further.43 “[O]ne on either condemning authorities or the new
thing is certain,” Ryan emphasized, “[t]he owners of condemned property.
level of employment at the new GM plant Nevertheless, it is possible to advance two
will be determined by private corporate man- tentative explanations. First, requiring a bind-
agers primarily with reference, not to the rate ing commitment to the creation of specific
of regional unemployment, but to profit.”44 economic benefits for the community might
Justice Ryan’s warning was prescient. The severely constrain the discretion of the new
GM plant opened two years late; and, as of owners, thereby possibly leading to inefficient
1988—seven years after the Poletown condem- business practices. For example, if GM had
nations—it employed “no more than 2,500 been required to ensure that at least 6,000
workers.”45 Even in 1998, at the height of the workers were employed at the Poletown plant,
Such confidence 1990s economic boom, the plant “still it might have been forced to forgo efficient
in the political employed only 3,600” workers, less than 60 labor-saving technology. Courts may well be
process is serious- percent of the promised 6,150.46 reluctant to intrude so severely on the new
Inability to Impose Binding Obligations as a owners’ business judgment. While this is a
ly misplaced in Systematic Weakness of the Economic Develop- serious problem with requiring binding com-
situations in ment Rationale for Condemnation. Poletown’s mitments, it also provides a strong argument
failure to impose any binding obligations on against permitting economic development
which politically the new owners of property condemned takings in the first place. If there is no way to
powerful interest under an economic development rationale ensure that the promised economic benefits
groups can was not idiosyncratic. The same problem is of condemnation are actually provided with-
evident in other states that permit economic out creating major inefficiencies, this circum-
employ the development takings. The Kelo case currently stance supports the Hathcock court’s conclu-
powers of before the U.S. Supreme Court is remarkably sion that economic development projects are
government at similar to Poletown in this respect. As the dis- best left to the private sector.49
senting opinion in Kelo points out, “[t]here A second possible explanation is that
the expense of the are no assurances of a public use in the devel- some judges may have an unjustified faith in
relatively weak. opment plan [under which the owners’ prop- the efficacy of the political process and thus
erty was condemned]; there was no signed may be willing to allow the executive and leg-
development agreement at the time of the islative branches of government to control
takings; and all of the evidence suggests that oversight of development projects. For exam-
the economic climate will not support the ple, the Poletown majority emphasized that
project so that the public benefits can be real- courts should defer to legislative judgments
ized.”47 of “public purpose.”50 Whatever the general
Other states that allow economic develop- merits of such confidence in the political
ment condemnations also fail to require process, it is seriously misplaced in situations
either the government or the new owners to in which politically powerful interest groups
actually provide the alleged public benefits.48 can employ the powers of government at the
Thus, Poletown’s failure is a systematic short- expense of the relatively weak.51
coming of the economic development ration- Lack of Binding Obligations Increases the
ale generally. It is not an idiosyncratic prob- Danger of Abuse. In the absence of any bind-
lem limited to Michigan or to the justices in ing obligations to deliver on the promised
the Poletown majority. economic benefits, nothing prevents munici-

6
palities and private interests from using ment is a legitimate public use justifying con-
inflated estimates of economic benefits to demnation, that rationale cannot and should
justify condemnations and then failing to not justify condemnation in cases in which
monitor or provide any such benefits once the resulting project imposes economic costs
courts approve the takings and the proper- that greatly exceed its benefits.
ties are transferred to their new owners. The Economic Costs of Poletown. The
Localities and businesses can circumvent Poletown case dramatically illustrates how the
the public use requirement simply by overes- promised economic benefits of condemna-
timating the likely economic benefits of a tions often fail to materialize and are out-
condemnation. Municipalities may overesti- weighed by the massive costs. Not only did the
mate intentionally, or they may simply take a new GM plant create far fewer jobs than
private business’s self-serving estimates at promised, but the limited economic benefits
face value. Little prevents municipalities and the plant did create were likely overwhelmed by
private interests from abusing the system. the economic harm the project caused the city.
Nothing in the Poletown heightened scrutiny The “public cost of preparing a site agree-
test can ensure that miscalculations are avoid- able to . . . General Motors [was] over $200
ed in future cases. Both business interests and million,”53 yet GM paid the city only $8 mil-
political leaders dependent on their support lion to acquire the property.54 In addition, we
have tremendous incentives to overestimate must add to the costs borne by the city’s tax-
the economic benefits of projects furthered payers the economic damage inflicted by the
by condemnation. Courts are in a poor posi- destruction of some 600 businesses and 1,400
tion to second-guess seemingly plausible residential properties.55 Although we have no
financial and employment estimates provid- reliable statistics on the number of people
ed by officials. Yet even if governments and employed by the businesses destroyed as a
businesses do not engage in deliberate decep- result of the Poletown condemnation,56 it is Even if we
tion, there is a natural tendency to overesti- quite possible that more workers lost than
mate the public benefits and the likelihood of gained jobs as a result of the decision. If we
consider the
success of projects that advance one’s own assume, conservatively, that the 600 eliminat- Poletown
private interests.52 Whether corporate and ed businesses employed an average of slightly condemnation’s
government leaders deliberately lie or honest- more than four workers, the total lost work
ly believe that “what is good for General force turns out to be equal to or greater than impact in
Motors is good for America,” the outcome is the 2,500 jobs created at the GM plant by narrowly
likely to be the same. This is a particularly 1988.57 And this calculation does not consider
serious problem when large-scale condemna- the jobs and other economic benefits lost as a
economic terms,
tions benefiting major corporations are at result of the destruction of numerous non- it is likely that it
issue, since such firms can easily generate profit institutions such as churches, schools, did the people of
massive quantities of sometimes dubious and hospitals. Overall, even if we consider the
“evidence” supporting their position. Poletown condemnation’s impact in narrowly Detroit more
economic terms, it is likely that it did the peo- harm than good.
Ignoring the Costs of Condemnation ple of Detroit more harm than good.
What is especially striking about the The failure of the Poletown takings to pro-
Poletown decision is the majority’s failure to duce any clear net economic benefit for the
even mention the costs imposed by condem- city has significance beyond the case itself. In
nation on the people of Poletown or the city Poletown, the magnitude of the economic
of Detroit as a whole. That omission not only crisis facing Detroit and the detailed public
facilitated a human tragedy but undermined scrutiny given to the city’s condemnation
the court’s ability to ensure that the takings decision led the court to conclude that the
served a public use in any meaningful sense. economic benefit of the taking was particu-
Even if we assume that economic develop- larly “clear and significant.”58 The court even

7
Although “fair went so far as to say, “[i]f the public benefit they were the subjects of a conquering
market value” was not so clear and significant, we would power. Thousands upon thousands of
hesitate to sanction approval of such a proj- small businesses are destroyed . . . .
may compensate ect.”59 If the claimed “public benefit” of even Whole communities are torn apart and
homeowners and so “clear” a case as Poletown ultimately turned sown to the winds, with a reaping of
out to be a mirage, it seems unlikely that cynicism, resentment and despair that
businesses for courts will do any better in weighing claims must be seen to be believed.64
part of the of economic benefit in more typical cases in
financial losses which the evidence is less extensive and less Although “fair market value” may compen-
closely scrutinized. sate homeowners and businesses for part of
they incur, it does Ignoring Costs in Other States. Those states the financial losses they incur, it does not com-
not compensate that continue to permit economic develop- pensate them for the destruction of commu-
them for the ment takings even after Poletown’s demise nity ties, disruption of plans, and psychologi-
also give little or no consideration to the cal harm they suffer.65 In recent years, scholars
destruction of harm they cause. In Kelo, the Connecticut from a wide range of ideological perspectives
community ties, Supreme Court admitted that the plaintiff have reinforced Jacobs’s early conclusion that
property owners in the case would suffer seri- development condemnations inflict enor-
disruption of ous harm if forced out of their homes and mous social costs that go beyond their “eco-
plans, and businesses.60 In addition, some $80 million nomic” impact, narrowly defined.66 The exis-
psychological in taxpayer money had been allocated to the tence of such large uncompensated costs
development project, without any realistic strengthens the case for stringent scrutiny of
harm they suffer. prospect of a return that rises above a tiny economic development takings.
fraction of that amount.61 Yet the court
refused to consider the significance of those Economic Development Takings and
massive costs, claiming “the balancing of the Interest Group “Capture” and Rent-
benefits and social costs of a particular proj- Seeking
ect is uniquely a legislative function.”62 Obviously, economic development takings
Contrary to the Connecticut court, the polit- are not the only exercises of the eminent
ical process often cannot be depended on to domain power that are vulnerable to capture
give due consideration to the “social costs” of by interest groups seeking to use the powers of
economic development takings; such con- government for their own benefit (“rent-seek-
demnations generally benefit the politically ing” as it is known in the literature). Indeed,
powerful, while the costs fall on the poor and interest group capture of government agencies
politically disadvantaged. Yet the approach and rent-seeking are serious dangers for a wide
adopted in Poletown and Kelo is similar to that range of government activities.67 However,
followed in other states that permit econom- there are three major reasons why economic
ic development condemnations.63 development takings are especially vulnerable
Nonmonetary Costs of Economic Develop- to this threat: the nearly limitless applicabili-
ment Takings. In addition to the economic ty of the economic development rationale;
costs to communities and homeowners, eco- severe limits on electoral accountability
nomic development takings also inflict major caused by low transparency; and time horizon
nonpecuniary costs on their victims by problems.
destroying communities and forcing residents Nearly Limitless Scope. As we have seen,
to relocate to less desired locations. As Jane the economic development rationale for tak-
Jacobs explained in her classic 1961 study: ings can potentially justify almost any con-
demnation that benefits a commercial enter-
[P]eople who get marked with the prise. Obviously, such a protean rationale for
planners’ hex signs are pushed about, condemnation exacerbates the danger of
expropriated, and uprooted much as if interest group capture by greatly increasing

8
the range of interest groups that can poten- the 1981 condemnations and two years
tially use it. By the same token, it also increas- behind schedule.69 And not until the late
es the range of projects that those interest 1980s did it become clear that the plant
groups can hope to build on condemned would produce far fewer than the expected
land that is transferred to them. Both factors 6,000 jobs.70
tend to increase the attractiveness of eminent By that time, of course, public attention
domain condemnations as a means of mak- had moved on to other issues, and in any
ing political payoffs to powerful interest event many of the politicians who had
groups. approved the 1981 condemnations were no
Severely Constrained Electoral Accountabil- longer in office. Given such limited time
ity. Interest group manipulation of economic horizons, a rational, self-interested Detroit
development takings could be curtailed if political leader might well have been willing
public officials responsible for condemna- to support the Poletown condemnations even
tions faced credible threats of punishment at if he anticipated that the expected benefits
the polls after they approved condemnations would eventually fail to materialize. By the
that reward rent-seeking. Unfortunately, such time that became evident to the public, he
punishment is highly unlikely for two impor- might well be out of office in any event. In
tant reasons. First, the calculation of the costs the meantime, he could benefit from an
Unlike with most
and benefits of most development projects is immediate increase in political support from conventional
extremely complex, and it is difficult for ordi- private interests benefiting from the taking. takings, the
nary voters to understand whether a particu-
lar project is cost-effective or not. Studies have Why “Heightened Scrutiny” Was Not success or failure
repeatedly shown that most voters have very Enough of a project made
little knowledge of politics and public policy.68 Unlike economic development takings
Most are often ignorant even of basic facts decisions in some other states,71 the Poletown
possible by
about the political system. Ignorance is likely opinion was careful to avoid giving a blank economic
to be an even more serious problem in a com- check for all condemnations that might be said development
plex and nontransparent field such as the eval- to promote development, emphasizing that
uation of projects promoted by economic “[o]ur determination that this project falls condemnations is
development takings. within the public purpose . . . does not usually apparent
While the same danger may exist with mean that every condemnation proposed by only years
some traditional takings, these usually at an economic development corporation will
least produce readily observable benefits meet with similar acceptance simply because it after the
such as roads and bridges—public goods that may provide some jobs or add to the industrial condemnation
can be seen and used by the average voter. By base.”72 Instead, the court held that “[w]here, as
contrast, the alleged public benefit of eco- here, the condemnation power is exercised in a
takes place.
nomic development takings is a generalized way that benefits specific and identifiable pri-
contribution to the local economy that the vate interests, a court inspects with heightened
average citizen often will not notice, much scrutiny the claim that the public interest is the
less measure. Second, even if voters were predominant interest being advanced.”73
much better informed, democratic account- Unfortunately, this “heightened scrutiny” test
ability for economic development takings failed to provide adequate protection against
may often be inadequate. Unlike with most eminent domain abuse, and in one crucial
conventional takings, the success or failure of respect actually made the situation worse.
a project made possible by economic devel- The purpose of the heightened scrutiny test
opment condemnations is usually apparent is to ensure that there is a “clear and signifi-
only years after the condemnation takes cant” public benefit resulting from a condem-
place. In the Poletown case, the GM factory nation. Unfortunately, this created a perverse
did not even open until 1985, four years after incentive to increase the amount of property

9
condemned rather than reduce it. Since the The failure of the heightened scrutiny test
public “benefit” involved is the “bolstering of to curtail the danger to private property creat-
the economy,” the larger the commercial pro- ed by the Poletown decision is evidenced by the
ject served by a condemnation—and the more prevalence of private-to-private condemna-
property owners expropriated as a result—the tions in Michigan. According to a recent
greater the chance that courts will find that the Institute for Justice study, from 1998 to 2002
resulting economic growth is “clear and signif- alone, at least 138 condemnation proceedings
icant” enough to pass the test.74 had been filed in Michigan for the purpose of
In fact, Michigan cases applying the height- transferring property to private parties; 173
ened scrutiny test displayed precisely this kind more were threatened.81 Michigan’s record in
of bias in favor of grandiose projects benefiting this respect compares poorly with that of
large corporate enterprises dispossessing large other states. In the five-year period from 1998
numbers of property owners. To be sure, courts to 2002, only two other states had more
applying the heightened scrutiny test have reported condemnation filings for the pur-
sometimes invalidated condemnations of small pose of transferring property to private inter-
amounts of property intended to benefit indi- ests.82 The City of Detroit—the jurisdiction
viduals and small- to medium-size businesses.75 involved in both Poletown and Hathcock83—
But in the main, Michigan courts applying achieved the dubious distinction of filing
Poletown felt themselves compelled to uphold more condemnations for private ownership
condemnations of large amounts of property than any other city in the nation in the same
for the benefit of major commercial enterprises. time period.84 Detroit condemnations includ-
Thus, in 1989 the Michigan Court of Appeals ed takings for casinos and sports teams, and
reluctantly held that Poletown required it to one in which a developer with ties to the
uphold the condemnation of 380 acres of pri- mayor was able to obtain a condemnation
vate property in order to “transfer the property that resulted in the destruction of an entire
to [the] Chrysler Corporation for the construc- African-American neighborhood.85
tion of a new automobile assembly plant.”76 The Institute for Justice figures may be
Ironically, the court of appeals believed that overly conservative. Because they were com-
both the Chrysler condemnation and Poletown piled from news reports and court filings,
According to a itself constituted “abuse[s] of the power of emi- they likely underestimate the prevalence of
recent Institute nent domain.”77 Nonetheless, it was forced to condemnations for the benefit of private par-
follow Poletown and endorse the validity of the ties.86 Many cases are unpublished, and many
for Justice study, condemnation of large amounts of property for other condemnations go unreported in the
from 1998 to 2002 the benefit of Chrysler.78 A 1995 court of press.87 Thus, we cannot know the true preva-
alone, at least 138 appeals decision reaffirmed this holding.79 And, lence of private-to-private condemnations in
of course, in Poletown itself, the construction of Michigan, nor can we be completely certain
condemnation a large GM plant was held sufficient to justify that Michigan really is one of the worst states
proceedings had the displacement of 4,200 people and 600 busi- in this regard. We can be reasonably confi-
been filed in nesses.80 dent, however, that Michigan’s heightened
The Poletown heightened scrutiny test pro- scrutiny requirement failed to reduce such
Michigan for the tects property owners least precisely when they condemnations to levels significantly below
purpose of need it most: in cases in which substantial those observed elsewhere, including in states
numbers of people are displaced for the bene- that lack heightened scrutiny.88
transferring fit of large, politically powerful interest
property to groups. Indeed, interest groups seeking to Condemnation Is Usually Not Necessary
private parties; ensure approval of condemnations under to Solve Holdout Problems
Poletown were well advised to plan large con- The case for a categorical ban on econom-
173 more were struction projects utilizing as much property ic development condemnations is further
threatened. as possible. strengthened by the fact that they are usually

10
not necessary to achieve their ostensible development rationale is allowed to justify The political
objectives. Large-scale development projects takings, it can be and has been used by pow- power of the
can and do succeed without recourse to the erful interest groups to facilitate projects
coercive power of eminent domain. that either fail to provide economic benefits beneficiaries of
The most common argument for eco- that justify their costs or could have been condemnations is
nomic development takings is that they are undertaken without resorting to coercion or
necessary to facilitate economic development both. The political power of the beneficiaries
likely to be a far
in situations in which large-scale projects of condemnations is likely to be a far more more potent
require assembling a large number of lots potent determinant of the decision to con- determinant of
owned by numerous individuals. If the coer- demn than any objective economic analysis
cive mechanisms of eminent domain cannot of holdout problems. the decision to
be employed, the argument goes, a small condemn than
number of “holdout” owners could either any objective
block an important development project or Exceptions That Swallow
extract an extremely high price for acquies- the Rule? Assessing Possible economic
cence.89 analysis of
But as is suggested by the existence of
Exceptions to a Ban on
numerous large development projects that Private-to-Private holdout
did not rely on eminent domain, private Condemnations problems.
developers have a variety of tools for dealing
with holdout problems without recourse to Hathcock and other decisions striking
government coercion. In many cases, devel- down the economic development rationale
opers can negotiate with individual owners fall well short of a complete ban on private-
in secret or use specialized “straw man” to-private condemnations. In fact, Hathcock
agents to assemble the properties they need laid out three scenarios in which such tak-
without alerting potential holdouts to the ings will still be upheld:
possibility of making a windfall profit by
holding the project hostage.90 1. Where “public necessity of the extreme
A second mechanism by which developers sort” requires collective action;
can prevent holdout problems without 2. Where the property remains subject to
recourse to eminent domain is by means of public oversight after transfer to a pri-
“precommitment” strategies or “most favored vate entity; and
nation” contract clauses. The developers can 3. Where the property is selected because
sign contracts with all the owners in an area of facts of independent public signifi-
where they hope to build, under which they cance rather than the interests of the
commit themselves to paying the same price private entity to which the property is
to all. By this means, the developer successful- eventually transferred.92
ly “ties his hands” in a way that precludes him
from paying inordinately high prices to the Those three categories deserve close
last few holdouts, because he would be legally scrutiny because, unless tightly constrained,
required to pay the same high price to all the they could let in by the back door the same
previous sellers.91 kinds of abuses that the Hathcock court
Finally, it is essential to realize that even if sought to prevent by closing the front door.
there is a small subset of desirable economic Moreover, at least two of the three exceptions
development projects that can be undertaken are not unique to Michigan but have coun-
only with the assistance of eminent domain, terparts in other states that forbid economic
there is no way of confining the use of eco- development takings. The Hathcock court
nomic development condemnations to those itself did not originate the three but con-
rare circumstances. Once the economic sciously borrowed them from Justice Ryan’s

11
famous Poletown dissent.93 But unlike Ryan tence” to “collective action,” or is it enough
in 1981, judges in Michigan and elsewhere for the government to prove that the individ-
now face the task of ensuring that his three ual project is impossible without the use of
exceptions stop short of swallowing the rule. eminent domain?99 Most likely, the govern-
ment’s burden of proof would be consider-
“Public Necessity of the Extreme Sort” ably easier if only the latter had to be estab-
The public necessity exception seems to be lished, since it is always possible to argue that
the least problematic of the three, as the a given project could be implemented only
Hathcock court was careful to confine it with- through use of eminent domain, especially if
in narrow bounds. Quoting Justice Ryan’s the relevant evidence is relatively complex.
1981 language, the court emphasized that Indeed, often the only way to know for sure if
this exception is limited to “‘enterprises gen- a project requires the use of eminent domain
erating public benefits whose very existence is to forbid its use and then see if the devel-
depends on the use of land that can be opers go forward anyway, utilizing noncoer-
assembled only by the coordination central cive means to acquire the property.
government alone is capable of achieving.’”94 However, the court appears to adopt the
As an illustrative example, the court cited the more restrictive categorical view. At least, this
Government classic case of a railroad that “must lay track seems to be the best interpretation of its cate-
agencies so that it forms a more or less straight path gorical dismissal of the possibility that “shop-
exercising the from point A to point B” and is thereby vul- ping centers, office parks, clusters of hotels,
nerable to “holdout” problems such that “[i]f and centers of entertainment and commerce”
condemnation a property owner between points A and B may require “collective public action for their
power are often holds out[—]for example by refusing to sell formation.”100 The underlying argument is
his land for any amount less than fifty times sound: although it is possible to imagine that
“captured” by its appraised value—the construction of the a given shopping center or office park might
powerful private railroad is halted unless . . . the railroad require the use of eminent domain, such insti-
interest groups accedes to the property owner’s demands.”95 tutions are not as dependent on the need to
Even the strongest advocates of judicial acquire unique sites as roads or railways; thus,
who use those enforcement of limits on public use concede assuming a competitive market in land, they
powers for their that the exercise of eminent domain is defen- are relatively unlikely to be undersupplied as a
own benefit sible in cases involving clear collective action result of collective action and holdout prob-
problems of this type.96 lems.
rather than that The court was careful to indicate that this
of the general rationale cannot be expanded to justify the Public Oversight and Control
use of eminent domain for the purpose of Hathcock’s second exception is much more
public. promoting ordinary commercial develop- problematic and potentially more dangerous
ment projects, such as the “business and than the first. Intuitively, the court’s conclu-
technology park” at issue in Hathcock.97 “To sion that private-to-private takings are permis-
the contrary, the landscape of our country is sible “where the property remains subject to
flecked with shopping centers, office parks, public oversight” seems appealing.101 At least
clusters of hotels, and centers of entertain- in theory, such “oversight” could reduce the
ment and commerce. We do not believe . . . likelihood that the power of eminent domain
that these constellations required the exercise is being used to facilitate rent-seeking behav-
of eminent domain or any other form of col- ior by private interest groups. Several other
lective public action for their formation.”98 states that ban economic development tak-
Nevertheless, there is an important ambi- ings follow a similar logic, concluding that
guity in the court’s holding here. Is the rele- public oversight or “control” might justify an
vant question whether the project at issue otherwise impermissible taking.102
falls into a category that owes its “very exis- But how much “oversight” is required? For

12
example, would the Poletown condemnation the adequacy of even very stringent oversight
have been permissible if GM had agreed to requirements. For example, Washington state
allow city officials to have a say in the man- courts have adopted a “literal” definition of
agement of the new factory, thereby enabling “private use” that forbids condemnation
them to exercise a degree of influence over its unless the government retains ownership of
economic impact on the city? What if the city the condemned property or creates a right of
owned the factory itself but gave GM a 99- access for the general public.103 On the surface,
year lease at nominal rent? such a requirement seems extremely stringent.
A broad interpretation of the public over- Yet consider the possibility that under this
sight exception would create two interrelated view the City of Detroit might have been able
risks, one obvious and one less so. The obvi- to take ownership of the Poletown property
ous risk is that a mere fig leaf of public con- while simultaneously allowing GM to use the
trol could be used to justify a condemnation land in any way it saw fit. Although Detroit’s
that effectively left the property under the “public oversight” would have been very
near-total control of the new owners. Under impressive in theory, in practice the situation
such an approach, the court could have justi- would be little different from what actually
fied the Poletown takings by requiring Detroit occurred.
to conduct periodic inspections of the GM Unfortunately, the Hathcock court says
factory, even if city officials were powerless to very little about the amount and type of
actually order GM to make any changes in its “public control” required for a condemna-
policies following the inspections. tion to fall within the exception. Significant-
A more subtle risk is the possibility that ly, the court did hold that the condemnation
oversight powers, however extensive in theo- in that case failed to meet the test because
ry, might prove inadequate in practice. The “[n]o formal mechanisms exist to ensure that
logic of the “public oversight” exception the businesses that would occupy what are
implicitly assumes that officials will use their now the defendants’ properties will continue
oversight powers to ensure that the new own- to contribute to the health of the economy.”
104
ers actually produce the public benefits used That statement implies that the necessary
to justify condemnation. But this assump- oversight cannot be just a fig leaf but must
tion clashes with the underlying dynamic actually ensure that the public benefit that
that leads to eminent domain abuse in the justified the condemnation—here, a contri-
first place: the fact that government agencies bution “to the health of the economy”—is
exercising the condemnation power are often actually achieved. If taken seriously, that
“captured” by powerful private interest requirement might invalidate not only tak-
groups who use those powers for their own ings with minimal oversight provisions but
benefit rather than that of the general public. even those more extensive ones that seem
If a local government is captured in this way, unlikely to be used in a way that actually
it is unlikely to impose meaningful account- ensures the achievement of the justifying
The public
ability on the new owners of condemned public purpose. oversight
property, even if its “oversight” authority is On the other hand, it is difficult to inter- exception poses
theoretically extensive. If, on the other hand, pret the court’s statement with any great con-
the political process has not been captured, it fidence. If taken literally, it contradicts the serious dangers
is not clear why the judiciary should require court’s own holding—stated just a few pages even if the degree
any oversight beyond what legislative and later—that “a generalized economic benefit”
executive officials have determined to be nec- is not, by itself, a valid public use under the
of oversight
essary. Thus, the public oversight exception state constitution.105 The court’s formula- required by
poses serious dangers even if the degree of tion of the public control exception suggests courts is
oversight required by courts is relatively high. that “economic benefit” could be a public use
This important point calls into question so long as there are adequate “formal mecha- relatively high.

13
Many states have nisms” put in place to ensure that the “bene- quent use of the property.”109 All 50 states and
expanded the fit” is actually created.106 It is possible that the District of Columbia have statutes that
the court merely meant to say that the permit condemnation of “blighted” property
concept of blight absence of such oversight mechanisms is suf- for redevelopment purposes.110
to encompass ficient to show that a condemnation does not Unfortunately, this line of argument has
pass muster. On that reading, the converse two serious flaws that reveal the major dan-
almost any area conclusion—that a condemnation that does gers of Hathcock’s “independent facts” excep-
where economic include such safeguards must be upheld— tion: overexpansion of the definition of
development does not necessarily follow. A definitive inter- “blight”; and interest group exploitation of
pretation of the court’s meaning must await the condemnation process, even in areas that
could potentially future cases. One can only hope that the really are “blighted.”
be increased. court will not interpret its decision in such a Overexpansion of the Definition of Blight.
way as to effectively gut the central benefit of The first danger is that the concept of “blight”
overruling Poletown: the abolition of econom- is vulnerable to creative expansion. Early
ic development takings. And the same holds blight cases in the 1940s and 1950s upheld
true for courts in other states that might condemnations in areas that closely fit the
choose to follow Michigan’s lead. layperson’s intuitive notion of “blight”: dilapi-
dated, dangerous, disease-ridden neighbor-
“Facts of Independent Public hoods. For example, in the famous Berman v.
Significance” Parker decision, which upheld blight condem-
Hathcock’s third exception is perhaps the nations under the federal takings clause, the
most problematic of the three, even though, condemned neighborhood was characterized
like the others, it makes considerable intuitive by “[m]iserable and disreputable housing con-
sense. The exception has special significance, ditions.”111 According to studies cited by the
however, because it has parallels in every other court, “64.3% of the dwellings [in the area]
state. The basic idea behind the “independent were beyond repair, 18.4% needed major
fact” exception, as the court explains, is this: repairs, only 17.3% were satisfactory; 57.8% of
“the act of condemnation itself, rather than the the dwellings had outside toilets, 60.3% had
use to which the land would eventually be put, no baths, 29.3% lacked electricity, 82.2% had
was a public use.”107 For that reason, the dan- no wash basins or laundry tubs, [and] 83.8%
ger of abuse on behalf of interest groups is lacked central heating.”112
minimized because it really doesn’t matter In the years since those early cases, many
what the new owners of the property do with states have expanded the concept of blight to
it, so long as the old, harmful uses of the con- encompass almost any area where economic
demned land are done away with. development could potentially be increased.
The court’s paradigmatic example of this In the recent West 41st Street Realty case, a New
type of scenario is the removal of “urban York appellate court held that the Times
blight for the sake of public health and safe- Square area of downtown Manhattan was suf-
ty.”108 As long as the blight is removed, it can ficiently “blighted” to justify the use of emi-
be argued, courts shouldn’t care about what nent domain to condemn land needed to
happens to the property afterward. Even build a new headquarters for the New York
courts that have invalidated economic devel- Times!113 In City of Las Vegas Downtown
opment takings endorse this reasoning. For Redevelopment Agency v. Pappas,114 another
example, the supreme court of Illinois, in a recent “blight” decision, the Nevada Supreme
major recent decision rejecting the economic Court held that downtown Las Vegas is blight-
development rationale, was careful to note ed, thereby permitting condemnation of prop-
that “[c]learly, the taking of slums and blight- erty for the purpose of building a parking lot
ed areas is permitted for purposes of clearance servicing a consortium of Las Vegas casinos.115
and redevelopment, regardless of the subse- The Nevada Supreme Court held that down-

14
town Las Vegas suffers from “[e]conomic often serves the interests of developers at the
blight [that] involves downward trends in the expense of people living or running businesses
business community, relocation of existing in the area. Indeed, condemnations in truly
businesses outside of the community, busi- blighted neighborhoods have probably caused
ness failures, and loss of sales or visitor vol- far more injustice and misery than either
umes.”116 Poletown-style economic development con-
Obviously, virtually any neighborhood, demnations in nonblighted areas or condem-
no matter how prosperous, occasionally suf- nations driven by dubious expansions of the
fers “downward trends in the business com- definition of “blight.”
munity, . . . business failures, and loss of Large-scale condemnations to alleviate
sales or visitor volumes.”117 If Times Square blight began with the “urban renewal” pro-
and downtown Las Vegas are “blighted,” it is grams of the 1940s and 1950s. Such takings
difficult to think of any place that isn’t. As uprooted hundreds of thousands of people,
the definition of “blight” expands, so too destroyed numerous communities, and in-
does the rationale for economic development flicted enormous social and economic costs,
takings. Almost any large commercial enter- with few offsetting benefits.123 A recent study
prise can argue that condemning land for its concluded that the use of eminent domain in
benefit might help improve “trends in the “urban renewal programs uprooted hundreds
Large-scale
business community.”118 The road from the of thousands of people, disrupted fragile condemnations
Berman-era cases to decisions like West 41st St. urban neighborhoods and helped entrench to alleviate blight
and Pappas exhibits a classic slippery-slope racial segregation in the inner city.”124 By 1963,
dynamic. That dynamic is difficult to guard over 600,000 people had lost their homes as a began with the
against because it is virtually impossible to result of urban renewal takings.125 The vast “urban renewal”
draw a nonarbitrary distinction between majority ended up living in worse conditions
“blighted” and “normal” areas and because than they had experienced before their homes
programs of the
powerful political pressures are exerted by were condemned,126 and many suffered seri- 1940s and 1950s.
development interests that benefit from con- ous nonpecuniary losses as well.127 More Such takings
demnation.119 recent blight condemnations have inflicted
The same slippage that occurred in New similar harms on communities and poor inflicted
York and Nevada is likely to recur in property owners.128 enormous social
Michigan and other jurisdictions that follow The sheer scale of forced relocations driven and economic
the Hathcock approach unless courts make by “urban renewal” condemnations dwarfs
strong efforts to guard against it early on.120 the harms inflicted by economic development costs.
Numerous state courts have either adopted condemnations in nonblighted areas. Al-
very broad definitions of “blight” or deferred though Poletown’s displacement of some 4,200
to legislative and administrative definitions people was regarded as extreme, it is worth
that reach a similar result.121 Moreover, in the noting that the blight condemnation upheld
vast majority of states, courts review blight in Berman condemned the homes of more
designations by redevelopment agencies only than 5,000 people,129 and this fact evoked little
under deferential standards such as “arbi- outrage or surprise among contemporary
trary and capricious” behavior, “abuse of dis- observers.130 Sociologist Herbert Gans esti-
cretion,” or “clear error.”122 This judicial def- mates that, altogether, some one million
erence greatly increases the danger of abuse. households were displaced by federally spon-
Abusive Condemnations in Truly “Blighted” sored urban renewal condemnations between
Neighborhoods. The second danger posed by 1950 and 1980.131 Assuming, as economist
the blight exception is perhaps even more seri- Martin Anderson did, that the average house-
ous. Even in cases in which the condemned hold size was equal to the 1962 national aver-
property really is blighted under a narrow def- age of 3.65 people,132 that means that federal-
inition of the term, condemnation of property ly sponsored urban renewal condemnations

15
forcibly relocated some 3.6 million people. Results like those should hardly surprise,
And this figure does not include blight con- given the forces unleashed once economic
demnations undertaken by state and local development condemnations are permitted.
governments on their own initiative.133 It is only to be expected that the condemna-
This history points to a serious flaw in the tion process would target those least able to
logic endorsed by Hathcock: that in blight cases resist it politically, which in many cities is
the disposition of condemned property is irrel- likely to be residents of poor and majority
evant because “the act of condemnation . . . black neighborhoods.
itself . . . was a public use.”134 As Herbert Gans This is not to suggest that the use of con-
points out, the key flaw in urban renewal con- demnation can never be justified as a means
demnations is precisely the fact that “redevel- of alleviating blight. For example, it may be
opment proceeded from beginning to end on the case that the elimination of blight
the assumption that the needs of the site resi- involves a collective action problem since no
dents were of far less importance than the clear- one property owner in a blighted neighbor-
ing and rebuilding of the site itself.”135 As a hood will have a strong incentive to make
result, the residents of blighted neighborhoods major improvements on his own property
suffered massive harm, while their former unless others in the area do the same. If he is
homes were converted to commercial or resi- the only one to make improvements, he is
dential uses that primarily benefited developers unlikely to recoup their full value because the
and middle-class city residents.136 In the Berman value of his property will still be dragged
case, for example, only about 300 of the 5,900 down by virtue of its location in a generally
new homes built on the site were affordable to dilapidated area. On the other hand, if all or
the neighborhood’s former residents.137 most of the other owners make improve-
Gans and other reformers recommend ments on their holdings, the first owner can
that redevelopment programs be redesigned reap the benefits of increased land values in
so as to create “benefit” for “the community the area even if he does nothing to improve
as a whole and for the people who live in the his own tract. Thus, some sort of centralized
slum area; not for the redeveloper or his even- coercion may be defensible in such cases,
tual tenants.”138 However, such recommenda- although it would not necessarily have to
tions are flawed because they assume that take the form of condemnation.
benefiting local residents and “the communi- Yet even if condemnation may be justified
Sociologist ty as a whole” is the real purpose of blight tak- theoretically in some cases of blight, the
ings to begin with. In reality, such condemna- interest group dynamics involved suggest
Herbert Gans tions often deliberately target poor and that real-world blight condemnations are
estimates that, minority property owners for the purpose of more likely to be driven by the needs and
benefiting politically powerful development interests of politically powerful developers
altogether, some interests and middle-class homeowners who and middle-class residents than those of the
one million are expected to move in after the redevelop- politically weak citizens of blighted neigh-
households were ment process is completed. So many poor borhoods. Thus, even if condemnation may
African Americans were dispossessed by be justifiable in theory, it should still be
displaced by urban renewal condemnations in the 1950s viewed with great suspicion in practice.
federally and 1960s that “[i]n cities across the country In sum, even in areas where there is “real”
sponsored urban urban renewal came to be known as ‘Negro blight—perhaps especially there—the condem-
removal.’”139 Urban elites deliberately focused nation process is likely to be abused for the
renewal urban renewal condemnations on the poor benefit of private interests at the expense of
condemnations and African Americans.140 Between 1949 and the poor and politically weak. The Hathcock
1963, 63 percent of all families displaced by court—like its counterparts in almost every
between 1950 and urban renewal condemnations were non- other state—was arguably wrong to allow an
1980. white.141 apparent blanket exemption for condemna-

16
tions based on “facts of independent public So. 2d 451, 457 (Fla. 1975) (holding that a “‘public
[economic] benefit’ is not synonymous with ‘public
significance.”142 Future cases will determine purpose’ as a predicate which can justify eminent
exactly how much harm this exception will be domain”); Merrill v. City of Manchester, 499 A.2d
allowed to cause. 216, 217-18 (N.H. 1985) (condemnation for indus-
trial park not a public use where no harmful condi-
tion was being eliminated); In re Petition of Seattle,
638 P.2d 549, 556–57 (Wash. 1981) (disallowing
Conclusion plan to use eminent domain to build retail shop-
ping, where purpose was not elimination of blight);
The recent judicial trend toward increasing Owensboro v. McCormick, 581 S.W.2d 3, 8 (Ky.
1979) (“No ‘public use’ is involved where the land of
skepticism of economic development takings A is condemned merely to enable B to build a facto-
is a positive development. County of Wayne v. ry”); Karesh v. City of Charleston, 247 S.E.2d 342,
Hathcock is in itself an important milestone in 345 (S.C. 1978) (striking down taking justified only
takings law. Even aside from its doctrinal and by economic development); City of Little Rock v.
Raines, 411 S.W.2d 486, 495 (Ark. 1967) (private
precedential value, the decision to overturn economic development project not a public use);
Poletown has tremendous psychological and Hogue v. Port of Seattle, 341 P.2d 171, 181-191
symbolic significance. Defenders of nearly (Wash. 1959) (denying condemnation of residential
unlimited condemnation power will no longer property so that agency could “devote it to what it
be able to cite Poletown as a “landmark case” considers a higher and better economic use,” id. at
187); Opinion of the Justices, 131 A.2d 904, 905-06
supporting their position.143 It is also signifi- (Me. 1957) (condemnation for industrial develop-
cant that post-Hathcock Michigan is only one ment to enhance economy not a public use).
of several states that have recently banned eco-
nomic development takings.144 5. County of Wayne v. Hathcock, 684 N.W.2d 765
(Mich. 2004).
At the same time, Hathcock and other sim-
ilar decisions are not a panacea for eminent 6. Poletown Neighborhood Council v. City of
domain abuse; their longterm impact will in Detroit, 304 N.W.2d 455 (Mich. 1981), overruled
large part depend on future judicial interpre- County of Wayne v. Hathcock, 684 N.W.2d 765
(Mich. 2004).
tation. Only time will tell whether the excep-
tions end up restoring Poletown by swallow- 7. Kelo v. City of New London, 843 A.2d 500, 511
ing the rule. The new direction in public use (Conn.) pet. cert. granted 125 S. Ct. 27 (2004).
law is a major step forward, but it is not the
8. Poletown, 304 N.W.2d at 464.
end of the road.
9. James W. Ely Jr., Can the “Despotic Power” be Tamed?
Reconsidering the Public Use Limitation on Eminent
Notes Domain, PROBATE & PROP., Nov.–Dec. 2003 at 31, 35.

This Policy Analysis is derived in part from a forth- 10. Poletown, 304 N.W.2d at 458.
coming article in the MICHIGAN STATE LAW REVIEW
Symposium on County of Wayne v. Hathcock. See Ilya 11. See, e.g., Prince George’s County v. Collington
Somin, Overcoming Poletown: County of Wayne v. Crossroads, 339 A.2d 278, 287 (Md. 1975) (1975
Hathcock, Economic Development Takings, and the Maryland high court decision holding that
Future of Public Use, 2004 MICHIGAN STATE LAW “industrial development” qualifies as a legitimate
REVIEW 1005. public use).

1. E.g., U.S. CONST., AMEND. V.: “ . . . nor shall pri- 12. See Ilya Somin, Michigan Should Alter Property
vate property be taken for public use without just Grab Rules, DET. NEWS, Jan 8, 2004, at 11 (brief
compensation.” description of the facts and background of
Poletown).
2. Hawaii Housing Auth. v. Midkiff, 467 U.S. 229,
241 (1984). 13. Poletown, 304 N.W.2d at 458.

3. THOMAS MERRILL & DAVID A. DANA, PROPERTY: 14. Kelo v. City of New London, 843 A.2d 500, 531
TAKINGS 196 (2002). n.39 (Conn.) pet. cert. granted 125 S. Ct. 27 (2004).

4. See, e.g, Baycol, Inc. v. Downtown Dev. Auth., 315 15. See Aaron v. Target Corp., 269 F. Supp. 2d

17
1162, 1175 (E.D. Mo. 2003) (owner likely to pre- 30. Daniels v. Area Plan Comm’n, 306 F.3d 445,
vail on claim that condemnation of shopping 466 (7th Cir. 2002).
center for transfer to Target so that Target would
keep its economic benefits in the city lacked pub- 31. See, e.g., Cincinnati v. Vester, 281 U.S. 439,
lic use); 99 Cents Only Stores v. Lancaster Redev. 447–48 (1930) (holding that “private property
Agency, 237 F. Supp. 2d 1123, 1129-31 (C.D. Cal. could not be taken for some independent and
2001), app. dismissed as moot, 2003 WL 932421 undisclosed public use”); County of San
(9th Cir. Mar. 7, 2003) (finding that condemna- Francisco v. Ross, 279 P.2d 529, 532 (Cal. 1955)
tion to replace one store with another, more (en banc) (invalidating agreement that lacked
lucrative one, was not a public use); Ga. Dep’t of controls over the use of the condemned property
Transp. v. Jasper County, 586 S.E.2d 853, 856 because “[s]uch controls are designed to assure
(S.C. 2003) (holding that even a “substantial . . . that use of the property condemned will be in the
projected economic benefit” cannot justify a public interest”); State ex. rel. Sharp v. 0.62033
“condemnation”); Southwestern Ill. Dev. Auth. v. Acres of Land, 110 A.2d 1, 6 (Del. Super. Ct. 1954),
National City Env., 768 N.E.2d 1, 9-11 (Ill.), cert. aff’d 112 A.2d 857 (Del. 1955) (holding that “[t]he
denied, 537 U.S. 880 (2002) (holding that a “con- doctrine of reasonable time prohibits the con-
tribu[tion] to economic growth in the region” is demnor from speculating as to possible needs at
not a public use justifying condemnation). some remote future time”) (emphasis in the origi-
nal); Alsip Park Dist. v. D & M P’shp, 625 N.E.2d
16. The eight states are Arkansas, Florida, Illinois, 40, 45 (Ill. App. Ct. 1993) (holding that “[I]f the
Kentucky, Michigan, Maine, South Carolina, and facts” in a condemnation proceeding “established
Washington. See cases cited in notes 5 and 15 that . . . [the condemnor] had no ascertainable
above. public need or plan, current or future for the land,
defendants [property owner] should prevail”);
17. See, e.g., Merrill v. City of Manchester, 499 A.2d Mayor of the City of Vicksburg v. Thomas, 645 So.
216, 217–18 (N.H. 1985) (condemnation for 2d 940, 943 (Miss. 1994) (holding that property
industrial park not a public use where no harmful may only be condemned for transfer to “private
condition was being eliminated); Opinion of the parties subject to conditions to insure that the
Justices, 250 N.E.2d 547, 558 (Mass. 1969) (hold- proposed public use will continue to be served”);
ing that economic benefits of a proposed stadium Krauter v. Lower Big Blue Nat. Res. Dist., 259
were not enough of a public use to justify con- N.W.2d 472, 475–76 (Neb. 1977) (holding that “a
demnation). condemning agency must have a present plan and
a present public purpose for the use of the prop-
18. Poletown, 304 N.W.2d at 459. erty before it is authorized to commence a con-
demnation action . . . . The possibility that the
19. County of Wayne v. Hathcock, 684 N.W.2d condemning agency at some future time may
765, 786 (Mich. 2004). adopt a plan to use the property for a public pur-
pose is not sufficient”); Casino Reinvestment Dev.
20. Id. at 783. Auth. v. Banin, 727 A.2d 102, 111 (N.J. Super. Ct.
1998) (holding that when a “public agency
21. Id. at 786 (emphasis in original). acquires . . . property for the purposes of con-
veying it to a private developer,” there must be
22. Poletown, 304 N.W.2d at 464 (Fitzgerald, J., advance “assurances that the public interest will
dissenting). be protected”).
23. Id. 32. Poletown, 304 N.W.2d at 459.
24. Southwestern Ill. Dev. Auth. v. National City 33. Id.
Env., 768 N.E.2d 1, 9 (Ill.), cert. denied, 537 U.S. 880
(2002). 34. Poletown, 304 N.W. 2d at 480 (Ryan, J., dis-
senting) (noting that “there will be no public con-
25. Owensboro v. McCormick, 581 S.W.2d 3, 8 trol” over the GM plant scheduled to be built on
(Ky. 1979). the Poletown site).
26. Id. (quoting 26 Am.Jur.2d Eminent Domain § 35. City of Detroit v. Vavro, 442 N.W.2d 730
34, at 684–85 (1966)). (Mich. Ct. App. 1989).
27. Id. 36. Id. at 731–32.
28. Poletown, 304 N.W.2d at 458. 37. See id. at 731 (upholding a taking transferring
property to the Chrysler Corporation for the con-
29. Id. struction of a new auto assembly plant despite

18
the fact that “Chrysler . . . has not entered into Collington Crossroads, 339 A.2d 278, 283 (Md.
a binding commitment with the City of Detroit to 1975). However, the control in question involved
construct the [plant] following the city’s use of merely the right to regulate the facility to ensure
the power of eminent domain”). “health, safety, and welfare, control . . . hazards
and nuisances, and guidelines for assuring a high
38. Id. quality physical environment; and a guarantee that
part of the project would be used as ‘open space.’”
39. Poletown, 304 N.W.2d at 459. Id. It did not create a binding obligation to produce
any actual economic benefits for the community of
40. Id. at 467 (Ryan, J., dissenting). the kind that were used to justify condemnation in
the first place.
41. See id. at 467–68 (citing statement of Mayor
Young and reprinting letter from Thomas A. 49. See Hathcock, 684 N.W.2d at 783–84.
Murphy, Chairman of the Board, General Motors,
to Coleman A. Young, (October 8, 1980)). 50. Poletown, 304 N.W.2d at 458–59.
42. Id. at 480. 51. For more extensive analysis of weaknesses in
the political process that might justify stronger
43. Id. judicial review, see Ilya Somin, Political Ignorance
and the Countermajoritarian Difficulty: A New
44. Id. Perspective on the Central Obsession of Constitutional
Theory, 89 IOWA L. REV. 1287 (2004) (showing how
45. Marie Michael, Detroit at 300: New Seeds of Hope political ignorance undermines common “coun-
for a Troubled City, DOLLARS & SENSE, July 2001. termajoritarian difficulty” arguments against
judicial review); Ilya Somin, Posner’s Democratic
46. Id. Pragmatism, 16 CRITICAL REV. 1 (2004) (showing
how political ignorance and interest group
47. Kelo, 843 A.2d at 602 (Zarella, J., dissenting). exploitation of the political process strengthen
the case for aggressive judicial review).
48. See, e.g., Gen. Bldg. Contractors v. Bd. of
Shawnee Cty. Comm’rs, 66 P.3d 873, 881-83 (Kan. 52. See STEVEN PINKER, HOW THE MIND WORKS
2003) (upholding economic development con- 421–23 (1999) (explaining how deception is more
demnation for purpose of building industrial facil- effective if those who seek to deceive actually
ity for later transfer to private owners with whom believe their own lies, as a result of which self-
no development agreements had as yet been interested self-deception may be a common
reached); City of Jamestown v. Leevers Supermar- genetic tendency of humans).
kets, Inc., 552 N.W.2d 365, 373-74 (N.D. 1996) (fol-
lowing Poletown approach and concluding that 53. Poletown, 304 N.W.2d at 470 (Ryan, J., dis-
economic development takings will be upheld so senting).
long as the “primary object” of the taking is “eco-
nomic welfare”); City of Minneapolis v. Wurtele, 54. Id.
291 N.W.2d 386, 390 (Minn. 1980) (holding, in a
case endorsing the constitutionality of economic 55. Michael, supra note 45 at 25. The estimate of
development takings, that “a public body’s deci- the number of businesses eliminated in the
sion that a [condemnation] project is in the public Poletown takings is in fact unclear. While Marie
interest is presumed correct unless there is a show- Michael cites a figure of 600, other sources cite
ing of fraud or undue influence”); Cf. Vitucci v. much lower numbers, in the range of 140 to 160.
New York City Sch. Constr. Auth., 289 A.D. 2d 479, See Somin, “Overcoming Poletown,” (forthcom-
480 (N.Y. App. Div. 2001) (holding that an eco- ing) for a more detailed discussion of these con-
nomic development taking passes muster despite flicting figures. If the lower estimates are correct,
the fact that the property was originally con- it would be much less likely that the number of
demned to build a school, because “as long as the jobs lost from the businesses shut down was
initial taking was in good faith, there appears to be equal to that created by the new factory. However,
little limitation on the condemnor’s right to put it is important to remember that the lost jobs
the property to an alternate use upon the discon- were wiped out immediately, whereas the new
tinuation of the original planned public purpose”). ones did not begin to appear for four years after
The Maryland Court of Appeals decision endors- the 1981 condemnations, and that the job losses
ing economic development condemnations was suffered from wiping out the businesses do not
partly based on the fact that the government “will include jobs eliminated by the destruction of
maintain significant control over the industrial Poletown’s churches, schools, and hospitals, nor
park” that the new owner used the condemned those lost as a result of the expulsion of over 4,000
property to build. Prince George’s County v. residents.

19
56. At the time, opponents of the condemnations subjective losses” because most property owners
claimed that 9,000 jobs would be lost as a result of value their holdings at more than their market
them. See John Bukowczyk, The Decline and Fall of a value).
Detroit Neighborhood: Poletown vs. GM and the
City of Detroit, 41 WASHINGTON & LEE LAW 66. See, e.g., Margaret Jane Radin, The Liberal
REVIEW 49, 68 (1984). This estimate, like GM’s Conception of Property: Cross Currents in the
own promise that 6,000 jobs would be created, Jurisprudence of Takings, 88 COLUM. L. REV. 1667,
must be viewed with skepticism. 1689–91 (1988) (making the case for limitations
on the eminent domain power because of the con-
57. According to data compiled by the city, some nection between “personal property” and individ-
one-third of the affected businesses closed down uals’ sense of personhood and community); David
immediately, while two-thirds of the remainder R. E. Aladjem, Public Use and Treatment as an Equal:
(approximately 40–45 percent of the original An Essay on Poletown Neighborhood Council v.
total) relocated to other parts of Detroit. BRYAN D. City of Detroit and Hawaii Housing Authority v.
JONES, ET AL., THE SUSTAINING HAND: COMMUNITY Midkiff, 15 ECOLOGY L.Q. 671, 673–74 (1988)
(1986). Even if we assume—implausibly—that (same); Richard A. Epstein, Property, Speech and the
those relocated businesses that stayed in Detroit Politics of Distrust, 59 U. CHI. L. REV. 41, 62 n.60
continued to employ as many workers as before, (1992) (criticizing Poletown as a “notorious” deci-
the area would have suffered a net job loss if the sion that “sustained a takeover of a neighborhood
approximately 350 businesses that either shut by General Motors that ignored huge elements of
down or moved outside of the city employed an losses to the private owners who were dispos-
average of just seven workers each. And, obviously sessed” and arguing for strict judicial constraints
that does not even consider the job losses and on similar condemnations).
other economic costs inflicted by the destruction
of schools, churches, and other nonprofit institu- 67. For a recent summary and analysis of the lit-
tions. erature on rent-seeking and capture, see DENNIS
C. MUELLER, PUBLIC CHOICE III 337–48 (2003).
58. Poletown, 304 N.W.2d at 459.
68. See Ilya Somin, Political Ignorance and the
59. Id. Countermajoritarian Difficulty: A New Perspective on
the Central Obsession of Constitutional Theory, 89 IOWA
60. See Kelo v. City of New London, 843 A.2d 500, L. REV. 1287, 1290–1304 (2004) (summarizing evi-
511 (Conn.) pet. cert. granted 125 S. Ct. 27 (2004) dence of extensive voter ignorance); Ilya Somin,
(noting that two of the plaintiffs’ families have Voter Ignorance and the Democratic Idea, 12 CRITICAL
“lived in their homes for decades and others had REV. 413, 413-19 (1998) (same).
put enormous amounts of time, effort, and
money into their property”). 69. JEANIE WYLIE, POLETOWN: COMMUNITY
BETRAYED 214 (1989).
61. Id. at 596-600 (Zarella, J., dissenting).
70. Id. at 214–5; Michael, supra note 45.
62. Id. at 541 n. 58.
71. See, e.g., cases cited in notes 5 and 15.
63. See cases cited in note 48, all of which set high-
ly deferential standards for evaluating economic 72. Poletown, 304 N.W.2d at 459.
development takings that take little or no
account of social costs. 73. Id.

64. JANE JACOBS, DEATH AND LIFE OF GREAT 74. Id. at 458–59.
AMERICAN CITIES 5 (1961).
75. See, e.g., Tolksdorff v. Griffith, 626 N.W.2d
65. See generally MINDY THOMPSON FULLILOVE, ROOT 163, 167–69 (Mich. 2001) (invalidating legislation
SHOCK: HOW TEARING UP CITY NEIGHBORHOODS that allows condemnation of limited amounts of
HURTS AMERICA, AND WHAT WE CAN DO ABOUT IT property in order to build roads for the benefit of
(2004) (describing extensive social and psycholog- landlocked property owners); City of Lansing v.
ical costs of forced relocation); HERBERT J. GANS, Edward Rose Realty, Inc., 502 N.W.2d 638,
THE URBAN VILLAGERS 362–86 (rev. ed. 1982) 643–46 (Mich. 1993) (invalidating taking of two
(same); BERNARD J. FRIEDEN & LYNNE B. SAGALYN, apartment complexes for the benefit of a cable
DOWNTOWN INC: HOW AMERICA REBUILDS CITIES television company); City of Novi v. Robert Adell
20–35 (1989) (same); Cf. Thomas W. Merrill, The Children’s Funded Trust, 659 N.W.2d 615,
Economics of Public Use, 72 CORNELL L. REV. 61, 622–29 (Mich. Ct. App. 2003), App. granted 687
82–85 (1986) (showing how the use of eminent N.W. 2d 297 (Mich. 2004) (invalidating condem-
domain systematically imposes “uncompensated nation for the purpose of building a small spur

20
line for the benefit of a private corporation); City LAW 43–44 (2d ed. 1977) (describing these meth-
of Center Line v. Chmelko, 416 N.W.2d 401, 402, ods).
404–407 (1987) (invalidating condemnation of
“two parcels of property” in order to facilitate 91. See THOMAS C. SCHELLING, THE STRATEGY OF
expansion of a “local car dealership”). CONFLICT 35-43, 120-31 (1960) (classic explana-
tion of the ways in which tying one’s own hands
76. Vavro, 442 N.W.2d at 730. can be an advantage in negotiations); see also
Donald J. Kochan, “Public Use” and the Independent
77. Id. at 731. Judiciary: Condemnation in an Interest-Group
Perspective, 3 TEX. REV. L. & POL. 49, 88–90 (1998)
78. Id. at 731–32. (explaining how precommitment strategies used
to prevent holdouts in corporate transactions can
79. See Detroit Edison Co. v. City of Detroit, 527 be applied to economic development projects
N.W.2d 9, 11 (Mich. Ct. App. 1995) (reaffirming that might otherwise need to resort to eminent
Vavro’s conclusion that approval of the Chrysler domain).
condemnations is required by Poletown).
92. Hathcock, 684 N.W.2d at 783 (quoting
80. Michael, supra note 45. Poletown, 304 N.W.2d at 478–80 (Ryan, J., dis-
senting).
81. DANA BERLINER, PUBLIC POWER, PRIVATE GAIN: A
FIVE YEAR, STATE-BY-STATE REPORT EXAMINING THE 93. See id. at 780-83 (relying extensively on
ABUSE OF EMINENT DOMAIN 100 (2003), http: Poletown, 304 N.W.2d at 478–80 (Ryan, J., dis-
//www.ij.org/publications/castle/. I should men- senting).
tion here that I wrote an amicus brief on behalf of
the Institute for Justice and the Mackinac Center 94. Id. at 781 (quoting Poletown, 304 N.W.2d at
for Public Policy in the Hathcock case. However, I 478 (Ryan, J., dissenting)).
had no role in the preparation of the empirical
study discussed here. 95. Id. at 781–82.

82. Id. at 2. 96. See, e.g., RICHARD A. EPSTEIN, TAKINGS: PRIVATE


PROPERTY AND THE POWER OF EMINENT DOMAIN
83. The technical plaintiff in Hathcock was the 162-69 (1985).
County of Wayne rather than the City of Detroit;
however, the purpose of the taking was to benefit 97. Hathcock, 684 N.W.2d at 783.
Detroit by promoting development near the
Detroit Metropolitan Airport. County of Wayne 98. Id. at 783–84.
v. Hathcock, 2003 WL 1950233 at *1–2 Mich. Ct.
App. Apr. 24, 2003), rev’d, 684 N.W.2d 765 (Mich. 99. Id.
2004).
100. Id. at 783–84.
84. Berliner, supra note 81 at 2.
101. Hathcock, 684 N.W.2d at 783.
85. Id. at 102–06.
102. See, e.g., Ga. Dep’t of Transp. v. Jasper County,
86. Id. at 100. 586 S.E.2d 853, 856 (S.C. 2003) (noting that a suf-
ficiently high degree of “public control” can vali-
87. Id. at 2. date an otherwise illegal taking); Mfg. Housing
Communities v. State, 13 P.3d 183, 189–90
88. Only one other state, Delaware, adopted the (Wash. 2000) (en banc) (holding that Washington
Poletown heightened scrutiny test. See Wilmington law requires a “literal” definition of forbidden
Parking Auth. v. Land with Improvements, 521 “private use” under which the government must
A.2d 227, 231 (Del. 1987) (holding that “when the exercise a high degree of control over the con-
exercise of eminent domain results in a substantial demned property in order to legitimate a taking,
benefit to specific and identifiable private parties, or allow the general public access to it after trans-
a court must inspect with heightened scrutiny a fer to the new owners).
claim that the public interest is the predominant
interest being advanced”). 103. Mfg. Housing Communities, 13 P.3d
189–90.
89. Merrill, supra note 65 at 72–81 (describing the
“holdout” rationale for use of eminent domain). 104. Hathcock, 684 N.W.2d at 784.

90. See RICHARD A. POSNER, ECONOMIC ANALYSIS OF 105. Id. at 786–87.

21
106. Id. at 784. THE URBAN VILLAGERS: GROUP AND CLASS IN THE LIFE
OF ITALIAN-AMERICANS 362–84 (2d ed. 1982) (docu-
107. Id. at 783. menting loss of community and economic harms
caused by condemnations); SCOTT GREER, URBAN
108. Id. (citing Poletown, 304 N.W.2d at 478–79 RENEWAL AND AMERICAN CITIES: THE DILEMMA OF
(Ryan, J., dissenting)). DEMOCRATIC INTERVENTION 3–5 (1965) (describing
various harms caused by urban renewal condemna-
109. Southwestern Ill. Dev. Auth. v. National City tions); Chester W. Hartman, Relocation: Illusory
Env., 768 N.E.2d 1, 9 (Ill.), cert. denied, 537 U.S. 880 Promises and No Relief, 47 VA. L. REV. 745 (1971)
(2002) (describing extensive uncompensated losses suffered
by victims of urban renewal condemnations).
110. Hudson Hayes Luce, The Meaning of Blight: A
Survey of Statutory and Case Law, 35 REAL PROP. 124. Pritchett, supra note 120 at 47.
PROB. & TR. J. 389, 391 (2000).
125. Anderson, supra note 123 at 8, 54.
111. Berman v. Parker 348 U.S. 26, 32 (1954).
“Slum clearance” was upheld as a public use to 126. Id. at 57–70.
justify condemnation under the Michigan state
constitution in 1951. In Re Slum Clearance, 50 127. See generally MINDY THOMPSON FULLILOVE,
N.W.2d 340 (Mich. 1951). ROOT SHOCK: HOW TEARING UP CITY NEIGHBOR-
HOODS HURTS AMERICA, AND WHAT WE CAN DO
112. Id. at 32. ABOUT IT (2004) (describing extensive social and
psychological costs of forced relocation); BERNARD
113. West 41st St. Realty v. N.Y. State Urban Dev. J. FRIEDEN & LYNNE B. SAGALYN, DOWNTOWN INC:
Corp., 298 A.D. 2d 1, 3–8 (N.Y. A.D. 1 Dept. 2002), HOW AMERICA REBUILDS CITIES 20–35 (1989) (same).
cert. denied, 123 S.Ct. 1271 (2003).
128. A 1994 summary of the evidence on redevel-
114. City of Las Vegas Downtown Redev. Agency opment takings concludes:
v. Pappas, 76 P.3d 1 (Nev. 2003), cert. denied, 124 S.
Ct. 1603 (2004). In essence, the powers and internal pres-
sures [of the blight condemnation process]
115. Id. at 12–15.
create a mandate to gentrify selected areas,
116. Id. at 13. resulting in a de facto concentration of
poverty elsewhere, preferably outside the
117. Id.
decision makers’ jurisdiction. Numerous
118. Id. past experiences indicate that the process
has been driven by racial animosity as well
119. See generally Eugene Volokh, Mechanisms of the as by bias against the poor. The net result is
Slippery Slope, 116 HARV. L. REV. 1026 (2003).
that a neighborhood of poor people is
120. On the history of blight condemnations and replaced by office towers, luxury hotels, or
their gradual expansion over time, see Wendell E. retail centers. The former low-income resi-
Pritchett, The “Public Menace” of Blight: Urban dents, displaced by the bulldozer or an
Renewal and the Private Uses of Eminent Domain, 21
YALE L. & POL’Y REV. 1 (2003). equally effective increase in rents, must
relocate into another area they can—per-
121. See Hudson Hayes Luce, The Meaning of Blight: haps—afford. The entire process can be
A Survey of Statutory and Case Law, 35 REAL PROP. viewed as a strategy of poverty concentra-
PROB. & TR. J. 389 (2000) (discussing numerous
tion and geographical containment to pro-
criteria for blight applied by statutory definitions
and court decisions). tect the property values—and entertain-
ment choices—of downtown elites.
122. Id. at 409–13. Several jurisdictions do not allow
review of blight designations at all. Id. at 413–14. Benjamin B. Quinones, Redevelopment Redefined:
Revitalizing the Central City with Resident Control, 27
123. See, e.g., JANE JACOBS, DEATH AND LIFE OF GREAT U. MICH. J.L. REFORM, 680, 740–41 (1994).
AMERICAN CITIES 5, 270-90, 311–14 (1961) (describ-
ing enormous social and economic costs of urban 129. Berman, 348 U.S. at 30.
development takings); MARTIN ANDERSON, THE
FEDERAL BULLDOZER (1964) (same); HERBERT J. GANS, 130. See, e.g., Pritchett, supra note 120 at 44 (noting

22
that “none of the briefs in Berman even men- 137. HOWARD GILLETTE JR., BETWEEN JUSTICE AND
tioned the fact that the project would uproot BEAUTY: RACE, PLANNING, AND THE FAILURE OF
thousands of poor blacks”); cf. Id. at 37–41 (not- URBAN POLICY IN WASHINGTON, D.C., 163–64
ing widespread contemporary support for early (1995).
urban renewal takings despite recognition that
thousands of poor residents would be displaced). 138. Gans, supra note 123 at 370.

131. Gans, supra note 123 at 385–86. 139. Pritchett, supra note 120 at 47.

132. Anderson, supra note 123 at 54. 140. Id.

133. For example, New York City “uprooted” 141. Frieden & Sagalyn, supra note 127 at 28.
some 250,000 people between 1946 and 1953
alone. Pritchett, supra note 120 at 37. 142. Hathcock, 684 N.W.2d at 783.

134. Hathcock, 684 N.W.2d at 783. 143. Kelo v. City of New London, 843 A.2d 500,
528 n.39 (Conn.), pet. cert. granted, 125 S. Ct. 27
135. Gans, supra note 123 at 368. (2004).

136. Id. at 369–71, 378–81. 144. See cases cited in notes 5 and 15.

23
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528. Fannie Mae, Freddie Mac, and Housing Finance: Why True Privatization
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527. Health Care Regulation: A $169 Billion Hidden Tax by Christopher J.


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525. When Ignorance Isn’t Bliss: How Political Ignorance Threatens


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524. Three Myths about Voter Turnout in the United States by John Samples
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523. How to Reduce the Cost of Federal Pension Insurance by Richard A.


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519. Nuclear Deterrence, Preventive War, and Counterproliferation by Jeffrey


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